Microfoundations of global value chain research: Big decisions by small firms

In this study, we introduce a unique longitudinal dataset from the Italian Ministry of Economy and Finance Annual Survey (IMEFAS) to assess how micro and small enterprises (MSEs) partake in the global economy by tapping into global value chains (GVCs). The results of the empirical analysis show that the great majority of micro and small enterprises are unable to establish direct links with GVCs. However, two sub-categories of subcontractors and branded producers were able to accomplish upgrading and partake in GVCs after the 2008 economic crisis. For both groups of firms, strategies implemented in domestic value chains contributed to their future participation in GVCs. By identifying small firms' value chain decisions associated with their ability to access GVCs directly, this study sheds light on the microfoundations of GVCs. It paves the way for the future intersection of small business economics and GVCs, two areas of research that have seldom talked to each other

Reshoring by small firms: dual sourcing strategies and local subcontracting in value chains

This article assesses how the reshoring of manufacturing activities by micro and small enterprises (MSEs) affects the performances of co-located subcontracting networks and the reconfiguration of global value chains (GVCs). We utilize quantitative microdata of Italian MSEs operating in the clothing and footwear industries during the 2008-2015 period. Empirically MSE reshoring does not have a significant impact on domestic subcontractors' birth rates and survival chances, whereas it is positively associated with their productivity growth. Most MSEs in our sample adopt a dual sourcing strategy, expanding their global production networks while preserving their local supply base. Local and global production networks are not two alternative paradigms of industrial organization; they can be complementary and mutually reinforce each other

Cultivating compliance: governance of North Indian organic basmati smallholders in a global value chain

Focusing on a global value chain (GVC) for organic basmati rice, we study how farmers’ practices are governed through product and process standards, organic certification protocols, and contracts with buyer firms. We analyze how farmers’ entry into the GVC reconfigures their agencements (defined as heterogeneous arrangements of human and nonhuman agencies which are associated with each other). These reconfigurations entail the severance of some associations among procedural and material elements of the agencements and the formation of new associations, in order to produce cultivation practices that are accurately described by the GVC’s standards and protocols. Based on ethnography of two farmers in Uttarakhand, North India, we find that the same standards were enacted differently on the two farmers’ fields, producing variable degrees of (selective) compliance with the ‘official’ GVC standards. We argue that the disjuncture between the ‘official’ scripts of the standards and actual cultivation practices must be nurtured to allow farmers’ agencements to align their practices with local sociotechnical relations and farm ecology. Furthermore, we find that compliance and disjuncture were facilitated by many practices and associations that were officially ungoverned by the GVC

The southern African poultry value chain : corporate strategies, investments and agro-industrial policies

Abstract: Following various regional investments in the last decade, production and participation in the poultry value chain in southern Africa has increased. One of the factors that determines entry into, and success in, a global value chain is the governance structure. This paper adopts a modular approach to analyse the governance structures in the poultry value chains in Botswana, South Africa, Zambia and Zimbabwe. A key finding is that various stakeholders have an influence on the regional poultry value chain in southern Africa, with the sources of influence depending on the formality of structures within the value chain

Beyond and beneath the hierarchical market economy: global production and working-class conflict in Argentina's automobile industry

This paper argues that the hierarchical market economy (HME) category does not provide an adequate starting point for addressing capitalist diversity in Latin America. Building from a critical perspective on the global commodity chain (GCC) and global production network (GPN) approaches, it instead considers the impact of firms’ transnational relations and the often neglected role of working-class struggles. It will argue that capitalist diversity can only be understood at the nexus of these ostensibly global and local phenomena; and by specifying the strategic decisions taken by firms in Argentina’s automobile industry, it will account for the failure of that sector. Finally, it examines the role of working-class struggles in the industry in Córdoba, Argentina, arguing that these were vital in shaping the specific and unstable form of capitalist diversity in Argentina, as well as potential alternatives to it

Global investments and regional development trajectories: the missing links

Global investments and regional development trajectories: the missing links. Regional Studies. Regional economic development has been long conceptualized as a non-linear, interactive and socially embedded process: these features were traditionally regarded as spatially mediated and highly localized. However, unprecedentedly fast technological change coupled with the intensification of global economic integration has spurred the need to place regional development in a truly open and interdependent framework. Despite substantial progress in the academic literature, rethinking regional development in this perspective still presents a number of challenges in terms of concepts, empirical evidence and policy approaches. Following an interdisciplinary assessment of how openness and connectivity – proxied by one of the many cross-border flows, i.e., global investments – interact with regional economic development trajectories, this paper presents a picture of the geography of foreign investments from and to the European regions and its change after the financial and economic crisis in 2008. This simple exercise sheds some initial light on how the operationalization of regional connectivity can improve one’s empirical understanding of the evolution of regional economies and the policy approach needed to support their reaction to change

Regulating Clothing Outwork: A Sceptic's View

By applying the strategies of international anti-sweatshop campaigns to the Australian context, recent regulations governing home-based clothing production hold retailers responsible for policing the wages and employment conditions of clothing outworkers who manufacture clothing on their behalf. This paper argues that the new approach oversimplifies the regulatory challenge by assuming (1) that Australian clothing production is organised in a hierarchical ‘buyer-led’ linear structure in which core retail firms have the capacity to control their suppliers’ behaviour; (2) that firms act as unitary moral agents; and (3) that interventions imported from other times and places are applicable to the contemporary Australian context. After considering some alternative regulatory approaches, the paper concludes that the new regulatory strategy effectively privatises responsibility for labour market conditions – a development that cries out for further debate

Local Embeddedness and Economic and Social Upgrading in Madagascar's Export Apparel Industry

Over the past decade, several Sub-Saharan African (SSA) countries have developed or expanded export-oriented apparel industries in the context of the Multi-Fibre Arrangement (MFA) quotas and preferential market access, most importantly under the African Growth and Opportunity Act (AGOA). Madagascar is different to the other main SSA low-income country (LIC) apparel exporters - Kenya, Lesotho and Swaziland - given its more diverse end markets and ownership structures and the political instability that led to the loss of AGOA status at the end of 2009. This paper assesses the development of Madagascar's export-oriented apparel industry and economic and social upgrading dynamics in particular in the context of the AGOA loss. It identifies four types of firms and value chains that differ with regard to ownership patterns, end markets and, most importantly, 'local embeddedness', with important implications for both economic upgrading dynamics and possibilities and the sustainability of the industry. The paper concludes that, despite the contraction in the exportoriented apparel industry post-AGOA, Madagascar is still a more successful apparel producer in terms of economic upgrading than the other main apparel-exporting LICs in SSA. The key to this trajectory lies in the differentiation of global value chain (GVC) relationships, local embeddedness and export diversification

Global value chains and human development: a class-relational framework

Global Value Chain proponents argue that regional and human development can be achieved through ‘strategic coupling’ with transnational corporations. This argument is misleading for two reasons. First, GVC abstracts firm-firm and firm-state relations from their class-relational basis, obscuring fundamental developmental processes. Second, much GVC analysis promotes linear conceptions of development. This article provides a class-relational framework for GVC analysis. The formation and functioning of GVCs and the developmental effects associated with them are products of histories of evolving and often conflictive, class relations. A study of export horticulture in North East Brazil provides empirical support for these arguments